Chinese-language search engine Baidu has decided to try and capture the massive mobile internet market in China by launching its own mobile browser, Baidu Explorer.

Baidu is already the dominant search engine China, which has 538m online users, but with 388m of these users accessing the internet via mobile phones, the company needs to tap into this vast market.

Other mobile products from Baidu include a mobile operating system that appears on low-cost smartphones the company produces with its manufacturing partners. But, with Baidu Explorer, it hopes to reach other smartphone users. The target, according to Reuters, is to have Baidu Explorer downloaded by 80pc of Android users in China by the end of this year.

Though there is already strong competition in the mobile browser market, Baidu claims its browser is 20pc faster than its rivals based on internal tests. It also has strong HTML5 compatibility and users can run HD video through the browser without having to download additional apps or software.

Hopes for 80 per cent penetration by year-end

China’s search-and-plenty-more giant Baidu has flagged a $US1.6 billion cloud investment. The investment, announced with a minimum of detail by CFO Li Xinzhe, will go towards building data centres and hiring staff.

The Chinese search firm also announced the launch of the Baidu Mobile Browser, which it says is designed to compete with Chrome and Safari. It claims a 20 percent performance boost over its rivals based on internal testing.

Briefing Asian journalists last Friday (August 31), Baidu said its mobile browser can play high-definition video without plugins or extra supporting software, according to Reuters.

The company said it hopes that 80 percent of China’s handsets will run its browser by the end of the year. By some astonishing coincidence, 80 percent is also the search market share the company claims in the Middle Kingdom, in the absence of Google, which has clashed with Chinese authorities over search censorship.

LONDON: HSBC‘s chief executive has apologised for shameful and embarrassing mistakes made on anti-money laundering controls as the bank set aside US$2bil to cover the cost of US investigations and compensate UK customers for misselling.

Europe‘s biggest bank reported a 3% dip in underlying profit and said it had made a provision of US$700mil to cover “certain law enforcement and regulatory matters” after a US Senate report this month criticised HSBC for letting clients shift funds from dangerous and secretive countries.

The report criticised a “pervasively polluted” culture at the bank and said that HSBC’s Mexican operations had moved US$7bil into the bank’s US operations between 2007 and 2008.

Gulliver: ‘What happened in Mexico and the United States is shameful, it’s embarrassing, it’s very painful for all of us in the firm.’

“What happened in Mexico and the United States is shameful, it’s embarrassing, it’s very painful for all of us in the firm,” chief executive Stuart Gulliver told reporters on a conference call yesterday, adding that the eventual costs could be “significantly higher”.

“We apologise for our past mistakes in relation to anti-money laundering controls, and it is a priority for senior management to build on steps already taken to manage risk and ensure compliance more effectively,” Gulliver said.

Analysts had said the US investigations could result in a fine of about US$1bil.

HSBC is also one of several banks being investigated in a global interest rate rigging scandal that has rocked the sector. Gulliver said it had submitted information to regulators but it was far too early to say what the outcome would be or to estimate the potential cost for the bank.

HSBC has set aside US$1.3bil to compensate UK customers for misselling loan insurance to individuals and interest rate hedging products to small businesses.

The bank reported a pre-tax profit of US$12.7bil for the six months to the end of June, up 11% on the year and above an average analyst forecast of US$12.5bil, according to a poll by the company.

But underlying profit, stripping out gains from US assets sales and losses on the value of its own debt, was down 3% on the year to US$10.6bil.

Shares in HSBC were up 0.7% to 534.6 pence, lagging a 1.8 % rise in Europe’s bank index. Reuters

(Reuters) – Four out of five Facebook Inc users have never bought a product or service as a result of advertising or comments on the social network site, a Reuters/Ipsos poll shows, in the latest sign that much more needs to be done to turn its 900 million customer base into advertising dollars.

The online poll also found that 34 percent of Facebook users surveyed were spending less time on the website than six months ago, whereas only 20 percent were spending more.

The findings underscore investors’ worries about Facebook’s money-making abilities that have pushed the stock down 29 percent since its initial public offering last month, reducing its market value by $30 billion to roughly $74 billion.

About 44 percent of respondents said the botched market debut has made them less favorable toward Facebook, according to the survey conducted from May 31 to June 4. The poll included 1,032 Americans, 21 percent of whom had no Facebook account.

Facebook’s 900 million users make it among the most popular online destinations, challenging entrenched Internet players such as Google Inc and Yahoo Inc. But not everyone is convinced that the company has figured out how to translate that popularity into a business that can justify its lofty valuation.

Shares of Facebook closed Monday’s regular trading session down 3 percent at $26.90. Facebook did not have an immediate comment on the survey.

While the survey did not ask how other forms of advertising affected purchasing behavior, a February study by research firm eMarketer suggests that Facebook fared worse than email or direct-mail marketing in terms of influencing consumers’ purchasing decisions.

“It shows that Facebook has work to do in terms of making its advertising more effective and more relevant to people,” eMarketer analyst Debra Williamson said.

Those concerns were exacerbated last month when General Motors Co, the third largest advertiser in the United States, said it would stop paid-advertising on Facebook.

Measuring the effectiveness of advertising can be tricky, particularly for brand marketing in which the goal is to influence future purchases rather than generate immediate sales.

And the success of an ad campaign must be considered in relation to the product, said Steve Hasker, president of Global Media Products and Advertiser Solutions at Nielsen.

“If you are advertising Porsche motor cars and you can get 20 percent of people to make a purchase that’s an astonishingly high conversion rate,” said Hasker.

“If you are selling instant noodles, maybe it’s not,” he

WANING ENGAGEMENT

About two out of five people polled by Reuters and Ipsos Public Affairs said they used Facebook every day. Nearly half of the Facebook users polled spent about the same amount of time on the social network as six months ago.

The survey provides a look at the trends considered vital to Facebook’s future at a time when the company has faced a harsh reception on Wall Street.

Facebook’s $16 billion IPO, one the world’s largest, made the U.S. company founded by Mark Zuckerberg the first to debut on markets with a capitalization of more than $100 billion.

It’s coming out-party, which culminated years of breakneck growth for the social and business phenomenon, was marred by trading glitches on the Nasdaq exchange. A decision to call certain financial analysts ahead of the IPO and caution them about weakness in its business during the second quarter has triggered several lawsuits against Facebook and its underwriters.

Forty-six percent of survey respondents said the Facebook IPO had made them less favorable towards investing in the stock market in general.

While Facebook generated $3.7 billion in revenue last year, mostly from ads on its website, sales growth is slowing.

Consumers’ increasing use of smartphones to access Facebook has been a drag on the company’s revenue. It offers only limited advertising on the mobile version of its site, and analysts say the company has yet to figure out the ideal way to make money from mobile users.

Facebook competes for online ads with Google, the world’s No. 1 Web search engine, which generated roughly $38 billion in revenue last year. Google’s search ads, which appear alongside the company’s search results, are considered among the most effective means of marketing.

The most frequent Facebook users are aged 18 to 34, according to the Reuters/Ipsos survey, with 60 percent of that group being daily users. Among people aged 55 years and above, 29 percent said they were daily users.

Of the 34 percent spending less time on the social network, their chief reason was that the site was “boring,” “not relevant” or “not useful,” while privacy concerns ranked third.

The survey has a “credibility interval” of plus or minus 3.5 percentage points.

(Reuters) – Facebook‘s shares fell again on Tuesday, leaving them down more than a quarter from Friday’s highs as questions mounted over the company’s financial prospects and its ability to grow fast enough to live up to the hype surrounding its stock.

After Friday’s nearly flat close and Monday’s 11 percent plunge, the stock dropped as much as 9 percent in early trading on Tuesday before reversing some of the decline.

Facebook shares were down 4 percent at $32.70 just after midday. Volume was again heavy, with more than 66 million shares traded. That followed turnover of 168 million shares Monday and 581 million on IPO day.

“There was a quick rush to exit yesterday, and when it broke the deal price it became self-fulfilling that there was going to (be) additional pressure. That’s continuing today even though there’s no real news on it,” said Michael James, a senior trader at regional investment bank Wedbush Morgan in Los Angeles.

Investors were still shaking their heads over the botched opening trading of Facebook when Reuters reported late Monday that the consumer Internet analyst at lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering.

JPMorgan Chase and Goldman Sachs, which were also underwriters on the deal, each revised its estimates during the road show as well, according to sources familiar with the situation.

One mutual fund source said they had never, in a decade of experience, seen an underwriter cut a company’s outlook during the road show prior to an offering.

Brokers, who over-ordered shares expecting supply would be limited, continued to complain they received too much stock to handle. Meanwhile some retail investors were already consulting lawyers.

STILL OVERVALUED?

As bad as the declines have been, a view persists that the stock remains overvalued.

With Monday’s closing price of $34.03, the market implied a 24 percent annual growth rate for earnings over the next 10 years — a rate that would rank above 90 percent of the companies in that industry.

Thomson Reuters Starmine, meanwhile, more conservatively estimates a 10.8 percent annual growth rate, which would value the stock at $9.59 a share, a 72 percent discount to its IPO price of $38.

Similarly, the company’s price-to-earnings ratio remains lofty, even after the selloff. The $34.03 price implies a forward P/E of 59, compared with Google’s 13.3 forward price-to-earnings ratio (for a similar rate of growth).

Investors said the challenge for the young company is to prove it can grow aggressively, to justify its lofty valuation and demonstrate its maturity.

“Wall Street is a severe taskmaster and they’re going to want to see quarterly results, then guidance, then subsequently they’re going to want to see that guidance beaten, and then the guidance raised,” David Rolfe, chief investment officer of Wedgewood Partners, said on Monday evening.

Besides the pressure on Facebook, there is also an intense focus on Nasdaq, which has shouldered much of the blame for trading failures last Friday. The exchange has already set aside money to compensate customers, but some on Wall Street are warning its ability to snag future big IPOs is at risk.

Barry Ritholtz, a widely followed financial blogger and the chief market strategist at Fusion IQ in New York, took all sides — Facebook, Morgan Stanley and Nasdaq — to task in the sharpest terms on his blog Tuesday.

“Thus, what we see are a series of bad decisions made by Facebook’s executives going back many years. The insiders got greedy, too clever by half, in how they used secondary markets. They picked a bad banker and an awful exchange,” Ritholtz said.

BEIJING– Reuters: China bagged foreign direct investment (FDI) at a record-setting pace in the first three months of 2012 but an easing in its monthly momentum and a difficult trade outlook will keep monetary policy poised to compensate for any dip in capital inflows.

The first quarter inflow of US$29.8bil leaves China on course to surpass 2011’s US$116bil record, even though inflows compared with a year earlier have fallen for five successive months, Commerce Ministry data showed.

A 53% leap in inflows to US$11.8bil in March from February typical after the Lunar New Year was a fresh sign that capital flow is firming enough to underpin money supply growth, following a US$124bil first-quarter jump in foreign exchange reserves, providing policy stays on its current pro-growth bias.

Steady growth: Workers assemble automobile parts at Changan Ford Mazda Automobile plant in Chongqing. A 53% leap in inflows to US$ 11.8bil in March from February is a fresh sign that China’s capital flow is firming enough to underpin money supply growth— AP

China’s government has been fine-tuning economic policy settings since the autumn of last year as the outlook for the global economy darkened, export growth sank and capital inflows a core component of money supply stalled.

The People’s Bank of China (PBOC) has cut by 100 basis points (bps) the ratio of deposits banks are required to keep as reserves (RRR) to keep credit and money supply growth steady. The two moves added an estimated 800 billion yuan (US$127bil) of lending capacity to the economy.

The PBOC said last week that broad money supply rose 13.4% in March from a year earlier, stronger than market expectations for 12.9% and ahead of the previous month’s 13% pace.

Economists forecast another 150 bps, or 1.2 trillion yuan in RRR cuts, for the rest of 2012 to help cushion China’s worst slowdown since the global financial crisis of 2008-09.

“There are signs that the economy has reached a bottom, but there’s nothing to suggest in recent data that equity investors should be positioning for a strong rebound or anything like a V-shaped recovery,” Thornton said.

EXTERNAL DEMAND

China’s economic growth has slowed for five straight quarters. The annual growth rate in the first quarter eased to 8.1% from 8.9% in the previous three months, below an 8.3% consensus forecast in a Reuters poll.

Reasonably strong FDI and a return to an overall trade surplus of US$5.35bil in March heralds the prospect that a revival in global growth is lifting overseas demand just in time to compensate for a slowdown in the pace of domestic activity.

FDI is an important gauge of the health of the external economy, to which China’s vast factory sector is orientated, but is a small contributor to overall capital flows compared to exports, which were worth about US$1.9 trillion in 2011.

Ministry of Commerce spokesman, Shen Danyang, told a news conference on the FDI data that the government was confident of achieving its target for trade growth in 2012 despite a difficult international economic backdrop.

China targets 10 percent growth for exports and imports in 2012, but both goals were missed in March when imports rose 5.3 percent and exports increased 8.9 percent over a year earlier.

Beijing has pledged to bring its current account into balance as it refocuses the economy more towards domestic consumption and away from volatile foreign demand for manufactured goods.

China’s two biggest export markets faltered through 2011. Demand from the European Union was dogged by the sovereign debt crisis, while a U.S. recovery was slow to take hold, especially among consumers.

For the first quarter as a whole, Customs Administration data from China shows the value of total exports was $430.02 billion, while imports were $429.35 billion – bringing the trade account roughly into the balance targeted by the government.

“If we want export growth to be stable, we must ensure that policies are stable,” Shen said. “If there are any policy adjustments, these adjustments will be more towards pro-exports rather than limiting exports.”

CURRENCY RISKS

But he said some exporters were nervous about the outlook for their business, particularly after China loosened its tightly controlled currency regime by doubling to 1 percent the daily trading band for the yuan against the dollar.

“Some exporters are a little bit worried, so they are not so sure about taking long-term orders, but only took short-term orders, mainly because they are not confident in managing exchange rate fluctuations,” Shen said.

The change, a crucial one as China further liberalises its nascent financial markets, underlines Beijing’s belief that the yuan is near its equilibrium level, and that China’s economy is sturdy enough to handle important, long-promised, structural reforms despite its cooling growth trajectory.

Slower growth is cautiously welcomed by China’s leadership as it allows them to make reforms, particularly to prices the government sets, with a reduced risk of igniting inflation that the ruling Communist Party fears could trigger social unrest.

The widening of the yuan’s trading band is the most significant adjustment made to China’s currency regime since a landmark decision in 2005 to de-peg the yuan from the dollar, which set the Chinese unit on an appreciating path that has seen it gain about 30 percent against the dollar.

In tandem, China has encouraged direct settlement of international trade in yuan, amounting to 2.08 trillion yuan ($333 billion) in 2011, more than triple that in 2010, central bank data shows.

Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, said 11.7 percent of March FDI flows were settled in yuan, up from 9.5 percent in February, 8.5 percent in January and 3.2 percent for all of 2011.

“Direct investment has become a new frontier for Chinese yuan internationalisation,” he wrote in a note to clients.

Beijing targets $120 billion in FDI inflows for each of the next four years, drawing up new rules to encourage foreign investment in strategic emerging industries, particularly those that bring new technology and know-how to China.